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TMI Blog1999 (10) TMI 745X X X X Extracts X X X X X X X X Extracts X X X X ..... e company on and from February 6, 1996. (d) To declare that the petitioners and respondent No. 8 are and continue to be the directors of the company. (e) To declare that the purported transfer of shares by the sixth respondent to the seventh respondent is illegal, invalid, null and void. (f) To restrain respondents Nos. 2 and 3 from acting as or holding themselves out to be the directors of the company. (g) To restrain respondents Nos. 2 and 3 from interfering with the holding of board meetings of the company. (h) To direct respondents Nos. 2 and 3 to hand over the statutory books of account and all other books, records and documents of the company to the special officer to be appointed by the Company Law Board. (i) To appoint a special officer to investigate into the conduct of respondents Nos. 2 and 3 in relation to the business and affairs of the company ; and (j) To direct respondents Nos. 2, 3, 6 and/or 7 to sell their shares to the petitioners. 2. The alleged acts of oppression and mismanagement relate to the following : (i) Alleged creation of stalemate and deadlock in the affairs of the company in order to obtain a better price for the shares held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me, resulting in conflict of findings and jeopardising the interests of the parties. In this connection, he referred to the order dated July 16, 1996, of the High Court of Calcutta appointing a special officer as joint administrator over the funds, assets and properties of the company. He further drew our attention to the specific observation of the High Court in para. 1 of the said order to the effect that .... until further investigation is made, it is difficult to accept the contention of defendants Nos. 1 and 2 that plaintiffs Nos. 2 and 3 ceased to be the directors of plaintiff No. 1 . He emphasised that the same relief is sought in the present petition before the Company Law Board. He submitted that the joint administrator, who is carrying on the day-to-day business and administration of the company, has not been made a party in the petition, without which the Company Law Board cannot grant any relief sought in the petition against the company. He further referred to the order dated August 16, 1999, of the High Court pursuant to the joint administrator initiating action for recovery of the outstanding amount due from several persons. Sarkar pointed out to the stand taken by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application filed by respondents Nos. 2 and 3 may not at all be considered by the High Court and the application is pending since 1997. The administrator though appointed by the High Court, is not an officer of the court. The administrator is only representing the shareholders. Hence, the company petition, without leave of the court, is maintainable. In this connection, Sen relied on Everest Coal Company Pvt. Ltd v. State of Bihar, AIR 1977 SC 2304. He further pointed out that respondents Nos. 2 and 3 originally sought before the High Court to cancel the board meetings and annual general meetings convened by the company and later by means of an amendment application claimed several reliefs, which are yet to be considered by the High Court. Respondents Nos. 2 and 3 have not prayed for sale of the shares under Section 402 of the Act. Moreover, the civil court will have no jurisdiction to grant such a relief. By virtue of Section 402 of the Act, the Company Law Board alone can direct the parties to sell or purchase the shares and in this regard the petitioners are willing to go by the order of the Company Law Board. Even if the amendment application is allowed by the High Court, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court of Calcuta against the petitioners and also an application seeking amendment of the reliefs claimed in the plaint. The following among other reliefs, are sought in the civil suit before the High Court : (i) to declare the board meetings of the company said to have been held subsequent to March 22, 1995, as null and void ; (ii) to declare the annual general meeting of the company for the year ended March 31, 1995, purported to have been held on September 29, 1995, as null and void ; (iii) to restrain the petitioners from giving any effect to any of the board meetings ; (iv) to restrain the petitioners from giving any effect to the annual general meeting of the company said to have been held on September 29, 1995 ; (v) to restrain the petitioners from acting as directors of the company ; (vi) to restrain the petitioners from altering the shareholding position in the company by issue of allotment of further shares in the company ; (vii) to declare the extraordinary general meeting of the company said to have been held on May 20, 1996, as null and void ; (viii) to declare the allotment of 7,500 ordinary shares in favour of respondents Nos. 4 and 5 in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h are agitated before the High Court. We will not be in a position to grant any remedy in the company petition without considering the issues of which the High Court is seized of the matter. In this connection, it is relevant to quote from a portion of the application in C. A. No. 22 of 1999 with regard to the disputes between the parties, which runs as under : There are disputes between the parties relating to the board meetings of respondent No. 1 shown to have been held by the petitioners on January 25, 1995, August 25, 1995, September 30, 1995, December 21, 1995, January 25, 1996, January 26, 1996, February 6, 1996, February 27, 1996, April 26, 1996, June 26, 1996, August 26, 1996, September 2, 1996, the minutes and resolutions relating thereto, the notices purported to have been issued for convening of such board meetings, an alleged notice dated April 26, 1996, allegedly issued for convening an extraordinary general meeting of the company on May 20, 1996, the purported extraordinary general meeting of the company shown to have been held on May 20, 1996, by the petitioners abovenamed, the minutes and resolutions relating thereto, the alleged increase of authorised share c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of the pendency of civil suit before the High Court of Calcutta has not been adjudicated by the Company Law Board. 15. Counsel for respondents Nos. 2 and 3 has not challenged the proposition enunciated in New Standard Coal Company Pvt. Ltd.'s case [1964] 2 Comp LJ 184 relied upon by counsel for the petitioners. In fact, respondents Nos. 2 and 3 have not pleaded that the company petition does not lie without the sanction of the High Court, in view of the appointment of a special officer. 16. The facts and circumstances of the case in West Bengal Pharmaceutical and Phytochemical Development Corporation Ltd.'s case, AIR 1982 Cal 94, cited by counsel for the petitioners can be distinguished from the facts of the present case especially in the former case, the High Court has held that the reliefs asked for in the civil suit are different from the reliefs sought in the company petition. 17. In view of the foregoing, since the civil proceeding before the Calcutta High Court is prior in time to the filing of the petition before us, to avoid conflict of decisions, we are inclined to stay the proceedings before the Company Law Board till disposal of the Civil Suit in No. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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